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Financial management - Essay Example

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The organization is the holding firm of Mark and Spencer Group of companies. The company is a clothing retailer found in United Kingdom with over 731 branches across the nation. The company sells the womenswear, home…
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Download file to see previous pages Spencer PLC has more than 703 branches across UK in retail parks and in high streets in addition to the airports, stations and other places ranging from the flagship store and out of town over square feet of 100,000 to conventional Food Stores of 7 thousand square feet.
The operating activities cash flow, the net cash gotten from the operations has been inconsistent from 666.5 M in 2009, 1601.80 M in 2010, 1197.50 M in 2011, 1443.30M in 2012, and 1236Min 2013. There was little impact of the currency movements on the sale and to the operating profit (Focardi & Fabozzi, 2004). Since the increase of the amortization the income tax reduced but this did not have any impact on the operating cash flow. The reduction in the net cash that the company earns means that the firm has less money to invest. This will subsequently lead to reduction in acquiring the assets and thus fewer dividends are declared to the investors. The cash adequacy ratio shows that the firm operating activities produces insufficient funds to meet the needed business obligations. The Spencer business has since reduced over the years which are evident from the reduction trend of the operating cash flows (“Foundations of Finance The Logic and Practice of Financial Management, Student Value Edition + Myfinancelab Package”. 2010). This means that the subsidiaries are deteriorating over the years. With the above data it is clear that the net cash flow has been reducing over the last three years which is not a good sign for the company.
The net investing cash flows from the investing activities have has unfavorable data which are in negative since 2009.. As outlined in the table the figures from 2009 shows a deficit of 251.7 M, 2010 showed a surplus of 253M, a deficit of 253.4 M for 2011, a deficit of 650.8 in 2012, and a deficit of 966.2 was reported in 2013. The company acquired properties, investments, equipment and ...Download file to see next pagesRead More
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